Love Low Prices? The Shocking Things These Companies Are Doing to Save You Money
When we spot a good deal on the shelf, we tend not to question it for too long before placing the item in our carts. We simply pat ourselves on the back and place another check in the “saving money” win column. But few companies are willing to take such losses on deeply discounted items unless they can make up the difference elsewhere.
When you dig into exactly how these companies are cutting costs to offer consumers such low prices, the reality is quite alarming. Some undercut other businesses, while others underpay their staff. And it’s a downhill slide from there, unfortunately. Here are 15 companies sliding into territory so despicable, it makes those low prices look like poison apples.
Amazon is no stranger to accusations from outside businesses of undercutting the market to offer the cheapest prices in town. This competition benefits consumers, but the troubling understory is the company’s extensive history of worker abuse. Both pilots and delivery drivers have accused the company of violating labor laws. Temporary workers in Germany fought back against low wages and poor living conditions in Amazon’s overseas logistic centers.
“Amazon pays its warehouse employees 15% less on average than the prevailing wage of other warehouse workers in the same region, and it is experimenting widely with ways, such as temporary and on-demand employment, to erode job security,” Stacy Mitchell, co-author of a report concluding Amazon eliminated about 149,000 more jobs in retail than it created in its warehouses tells USA Today.
But consumers are quick to forget such negligence when their orders ship for free.
Next: The shocking ways America’s favorite retailer saves money
Walmart is one of the world’s largest and cheapest retailers, but its low prices aren’t a result of its giving nature. Walmart has repeatedly come under fire for wage theft, labor law violations, and gender discrimination in stores and manufacturing facilities. A 2006 National Labor Committee report detailed how young children in Bangladesh worked up to 110 hours a week in torturous conditions for only 6.5 cents per hour.
A 2013 report also showed women were paid $1.16 less per hour than their male counterparts and women in salaried positions earned $14,500 less. When multiple reports surface of wage theft, meaning employees were forced to work through their breaks and mealtimes, Walmart was forced to fork over $151 million in unpaid wages and damages to affected employees.
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We won’t try to convince you Apple products are cheap, because they’re not. But it is unsettling to know that one of the most successful corporations in the world is pinching pennies by opting not to pay workers during meal breaks. About 21,000 employees were the focus of a class-action lawsuit finally settled in 2016 after they were not given required lunch breaks and corresponding compensation. One worker even told Tim Cook he felt they were treated like “criminals.”
If the $2 million settlement check was to be divided among workers, it would average just $95 per employee.
Next: What’s the deal with Whole Foods?
4. Whole Foods
Those not consumed with a Whole Foods love affair often refer to the trendy, yet costly grocery store as “Whole Paycheck.” Years ago, Whole Foods enjoyed an open market as one of the few stores peddling premium organic products. Today, stores with lower prices are hacking the chain’s bottom line.
In its heyday, the Whole Foods CEO commonly spoke out against unions as the store was simultaneously being accused of keeping workers in poverty. According to a 2013 report, AlterNet outed the chain for being “under investigation for 45 violations of federal labor law, including physically threatening immigrant workers in California who were trying to form a union.” Other San Francisco employees protested $11.50 an hour pay — income that hardly meets a $30 per hour wage required to make it in the area.
Amazon recently acquired Whole Foods and slashed prices by 43%. But given what we already know about Amazon’s cost control methods, we’re not necessarily sure we like it.
Next: Affordable fashion retailer unable to resist cheap foreign labor
5. Gap, Inc
Gap previously raised the minimum wage for its employees in hopes to attract more job seekers. But the store once regarded as an affordable fashion choice for the average American has been struggling to attract customers for years. It’s due in large part to retail’s widespread demise, but Gap’s history of worker abuse to cut costs doesn’t help.
For one, domestic workers don’t receive benefits in spite of earning higher wages. Worse, child sweatshops and demanding working conditions that directly violate Gap’s factory-monitoring program were discovered in New Dehli, as well as at the thousands of other less-than-stellar production factories located in 50 countries.
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6. ConAgra Foods
The secrets behind ConAgra’s affordable products are alarming to those who frequently purchase Chef Boyardee, Hunt’s, or Orville Redenbacher items. In 2014, it faced over $117,000 in OSHA fines for failing to protect workers from dangerous machinery and other occupational hazards.
The firm has also received numerous pollution fines acquired by cutting corners in its farming and processing procedures. ConAgra’s environmental injustice violates various clean water policies and poses public health risks to many along the Mississippi River.
Next: Prices won’t seem so sweet after reading about this next company
Behind the delicious chocolates and sweet dairy products available in stores, Nestle was cutting corners to radically reduce production prices — no matter who or what was harmed in the process. The company began dipping its toes in the profitable bottled water industry and started skirting usage restrictions by pumping on California land reservations, which are not accountable to states as sovereign lands. As a result, it has been able to consistently exceed established export levels of groundwater without penalty. Many fear this practice is detrimental to the drought-prone state.
Unfortunately, Nestle is no stranger to labor law violations, either. The Fair Labor Association accused the company of violating its own code. The FLA linked violent torture and rampant worker injuries on the Ivory Coast in Africa to the Nestle supply chain initiatives.
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Perhaps one reason Kroger can afford to sell cheap groceries is because it chooses to cut costs elsewhere. Unfortunately, it’s the employees that take the brunt of such efforts. Kroger consistently lands on the list of the worst companies to work for. Some employees are barely paid above the minimum wage of $7.25 per hour. The grocery CEO enjoys hefty annual raises, though.
Next: Overworked at the entry-level
9. Merrill Lynch
The very people tasked with helping you manage your money are also known for severely overworking interns. In 2013, a Merrill Lynch intern died from a fatal seizure that many believed was triggered by working three 21-hour shifts in a row. This unfortunate incident supported earlier University of Southern California research from 2012 suggesting banking and illness are closely linked. After a decade of tracking 24 entry-level investment bankers, the researchers found every one of them developed serious stress-related illnesses.
Next: Dollar-store prices come at a cost
10. Family Dollar
Prices won’t get much lower than the ones advertised on Family Dollar shelves. For consumers looking for a deal, it’s a wonderful surprise. But behind the scenes, countless store managers were once working upwards of 60 hours a week sans overtime pay. They were also performing extra duties outside of what was outlined in the managerial job description. The employee-driven lawsuit snowballed with additional similar claims. A $1.5 million settlement was reached in 2017 resolving the claims of over 517 store managers.
Next: Another tech giant with some explaining to do
Apple isn’t the only tech company committing shocking acts in exchange for lower prices. Samsung was forced to explain a 2014 accusation that its China suppliers, pressed to meet a production goal, hired children to work 11-hour days for as long as six months without payment or any semblance of insurance.
“The glamorous shop displays and marketing of state-of-the-art technologies are a stark contrast to the children carrying bags of rocks, and miners in narrow man-made tunnels risking permanent lung damage,” Mark Dummett, a human rights researcher at Amnesty International tells Newsweek. “Millions of people enjoy the benefits of new technologies but rarely ask how they are made. It is high time the big brands took some responsibility for the mining of the raw materials that make their lucrative products.
Samsung did, however, issue an official apology for the lives harmed.
Next: Energy provider under fire
12. Alpha Natural Resources
If any of your electricity comes from coal-fired sources, then it’s likely mined from Alpha Natural Resources. Americans know Alpha for their heat-related needs, but the company is equally famous for dubious ethical practices and unsatisfactory treatment of workers. Alpha received a record-setting $27.5 million fine from the Environmental Protection Agency for spewing pollutants in waterways across the Appalachians from Kentucky to Pennsylvania, Virginia, Tennessee, and West Virginia. This, of course, was a far cry from its “Running Right” company mission.
Next: Popular poultry producer
13. Tyson Foods
A history of worker injury and negative press prompted Tyson Foods to issue a statement in 2017 announcing it hoped to achieve a 15% year-over-year reduction in injuries and illnesses. This was after Oxfam reported Tyson workers wore diapers to contain their waste since they were denied bathroom breaks during shifts. Other reports surfaced about multiple knife injuries as a result of such tight quarters on the worker assembly line.
Next: Yet another banking giant
14. Goldman Sachs
Not one to break the grueling banking stereotype Merrill Lynch portrays, Goldman Sachs seems determined to continually prove why it’s one of the most hated companies in America. In addition to sexual harassment allegations and a shady discrimination record, the banking giant is also on the hook for pay inequality. Former employees are suing the company for asking them to perform menial tasks and offering 50% less compensation than their male coworkers. Other former employees have condemned the harsh work days and demanding expectations set by the C-suite.
Next: Trendy fashion retailer
15. Forever 21
Fashion retailer Forever 21 is known for trendy styles at bargain prices. But like so many other popular U.S. retailers, it relies on overseas factories to handle demand. The LA Times says it best. “Behind a $13 shirt, a $6-an-hour worker.”
“Rather than planning seasons in advance, brands are introducing new styles and products every few weeks,” Liana Foxvog, director of organizing and communications at the International Labor Rights Forum tells Racked. “The way that they keep up with these new styles and constantly changing images is by forcing the factories to have really short turnaround times.”
Follow Lauren on Twitter @la_hamer.
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